Sessional_Paper_1908 — Page 108

The trade of Hongkong is so closely connected with that of the Two Kwang provinces that any attempt to rehabilitate the Colony's Subsidiary Coinage by restricting or prohibit- ing under penalties the use of Canton coins in Hongkong, as provided for in the proposed Ordinance submitted by the Chairman, would in the opinion of the undersigned bring about a further depreciation of these coins and might lead to financial disabilities, if not to measures of retaliation by the Canton Authorities, adversely affecting the trade of the Colony.

It is therefore advised by the undersigned that the Government of Hongkong should

1. Impress on the Imperial Chinese Government through the usual official channels the urgent necessity of China reforming her Currency in terms of the Mackay treaty.

2. Enter into negotiations with the Imperial Chinese Government through H. B. M.'s Minister at Peking with a view to arriving at an agreement whereby the Chinese Imperial Government undertakes:-

(a.) to discontinue the output of subsidiary coin from the Canton Mint. until such time as both Hongkong and Canton subsidiary coins reach par value, (which in opinion of the undersigned they will do very soon under these circumstances)

and (b.) In consideration of the Hongkong Government agreeing not to issue more subisdiary coin except for the Colony's own use, to only mint new subsidiary coins sufficient to meet the public demand so as to maintain the face value of their coins at par.

The undersigned further desire to recommed to the Government that the second pro- posal should be taken in hand first, and they respectfully suggest that a capable official of the Colony be seconded without delay to proceed to Peking to furnish H.B.M.'s Minister with detailed information during the negotiations.

In the event of the negotiations being without result the undersigned recommend that the Committee be called together again six months hence to further deliberate.

A copy of the Chairman's Report, which has been supplied to us, is attached bearing our annotations.

Hongkong, 5th November, 1907.

D. R. LAW.

A. G. WOOD.

J. R. M. SMITH.